5 convicted of inventing movie to hide tax fraud

In some ways "A Landscape of Lies" was a typical indie film, with a tiny budget, a B-list cast and an award from an American film festival.

What made it special is that it was created solely to cover up a huge tax fraud.

Five people in Britain face jail sentences after being convicted this week of attempting to bilk the government of 2.8 million pounds ($4.2 million) in a moviemaking scam reminiscent of Academy Award-winning hit "Argo" — without the heroic hostage rescue.

Prosecutors and tax authorities say the fraudsters claimed to be producing a made-in-Britain movie with unnamed A-list actors and a 19 million-pound budget supplied by a Jordanian firm.

In fact, officials say, the project was a sham, set up to claim almost 1.5 million pounds in goods and services tax for work that had not been done, as well as 1.3 million pounds under a government program that allows filmmakers to claim back up to 25 percent of their expenditure as tax relief.

Britain's tax agency, Her Majesty's Revenue and Customs, said that the filmmakers had submitted paperwork and already received 1.7 million pounds when checks revealed "that the work had not been done and most of the so-called suppliers and film studios had never heard of the gang."

The self-described movie producers were arrested on suspicion of tax fraud in April 2011 — and decided their best shot at avoiding criminal charges was to hastily make a film.

Paul Knight, a true-crime writer turned low-budget filmmaker, was hired to write and direct "A Landscape of Lies," described in its Internet Movie Database entry as a crime thriller about a Gulf War veteran out for justice for a murdered comrade.

Just as in "Argo" — in which the CIA dreams up a fake sci-fi movie, complete with screenplay, posters and advertisements as cover for a hostage-rescue mission — the production was announced in film industry magazines. The casting of Andrea McLean, a host of talk show "Loose Women," as a troubled, bisexual therapist was reported in the tabloid Sun. The producers also recruited a former soap actor — Marc Bannerman from the BBC's "EastEnders."

Neither the stars nor Knight were accused of knowing about the fraud.

"A Landscape of Lies" was released straight to DVD in Britain in 2011. But it did garner some fans, winning a commendation called a Silver Ace award at last year's Las Vegas Film Festival.

That wasn't enough to deter the tax authorities. Five producers from various parts of Britain — Bashar Al-Issa, Aoife Madden, Tariq Hassan, Ian Sherwood and Osama Al Baghdady — were convicted Tuesday of conspiracy to cheat the public revenue at London's Southwark Crown Court. They will be sentenced March 25.

Tax officials said the case marked the agency's first-ever prosecution for film-tax fraud.

"We are pleased that instead of this film flop going straight to DVD, these small-screen z-listers could go straight to jail," said John Pointing, the revenue agency's assistant director of criminal investigation.